Lord Davies' targets for women on boards 'will be missed'

The FTSE 100 is set to miss Lord Davies' target for women directors by two years and FTSE 250 will miss it by four, accorind go the Norman Broadbent Board Index.

The Index, which tracks changes throughout the FTSE 100, 250 and Small Cap component companies over the past year on a number of issues, including average age, time spent in roles, gender, and the number of new board members attaining their first position, found that only one in 18 executive directors is female across all FTSE indices, although the numbers have increased over the last year.

The number of non-executive posts for women has risen faster than that for executive directors, with the age, length of stay in a role and number of roles staying the same. 

The percentage of women on boards across the three FTSE indices has increased: FTSE 100 by +16% to 14.9%; FTSE 250 by +18% to 9.4%; and FTSE Small Cap by +27.9% to 9%.

In the FTSE 100, 26% of NED appointments in the past year were female, and 9% of executive directors; in the FTSE 250 24% of new NEDs were female, and 7% of executives; and in the FTSE Small Cap 17% of new NEDs were female, and 7% of executives.

The best performing sectors on gender balance at board level have been retail, technology & media and health; all male boards are prevalent within the industrial sector, the Index finds.

The Index calculates that based on existing rates of change, the FTSE 100 will miss the Lord Davies’ 25% target for 2015 for the female composition of boards by two years. FTSE 250 companies will miss it by four years.

Barry Dinan of Norman Broadbent’s Board Practice said: “We need to be conscious that NEDs fulfil a vital function in safeguarding shareholders’ interests and the sustainable development of companies. While it is totally understandable and appropriate that there has been a drive to recruit more women to non-executive positions, we should not lose sight of the need for more women throughout executive and senior management roles within business; such planning should be a clear element of a company’s growth strategy.”

Responding to the industrial sector’s prevalence for male directors, Neil Holmes of Norman Broadbent’s Board Practice said: “We are finding that women are appearing on shortlists, but the supply on the executive side is still lower than it should be and this requires companies to invest in long term cultural changes to ensure that in the future, women vying for executive roles have the depth and breadth of experience that is today more prevalent among their male counterparts; this must be about quality derived from retention and experience, and not about tokenism.”